The California Attorney General has responded to the suit filed by Mitchell Stein, Esq. that he filed against people as an extension of the California mass joinder raids, see an article on a similar suit here. This suit by Stein was filed in several states, including Florida, California, and New York.

The response by the California Attorney General’s office rebuts some of the allegations made. The response states:

Mitchell Stein, and his law firm were sued last month by the California Attorney General and a temporary restraining order was issued to “freeze personal assets held in Stein’s name and place them under the control of a court-appointed receiver.” The court granted the motion, “finding absent such relief, Stein was likely to continue violating the law and to dissipate ill-gotten gains that rightfully belonged to the victims.”

The State of California action against Mitchell Stein alleged “involvement in a widespread mortgage-fraud scheme by which they used false and misleading representations and an illegal running-and-capping scheme to introduce homeowners into joining so-called “mass joinder” lawsuits against their mortgage lenders.”

“The California Attorney General’s complaint alleges that the Mass-Joinder Defendants bilked homeowners out of millions of dollars by the use of deceptive mailers, brochures, and websites, and numerous false and misleading representations.”

One of the points I read from commenters often in respond to the California AG action and raids is that the AG is trying to stop legal actions against the banks. The AG response address this is when it says, “The California Attorney’s complaint expressly takes no position on the underlying merits of the mass-joinder lawsuits filed by Stein, but instead relates solely to the means by which Stein and other Mass Joinder Defendants marketed the suits.”

Apparently the reason Stein filed this action on the bankruptcy court in Florida is due to his ongoing bankruptcy case he filed March 13, 2009, just one day after he filed his first mass joinder lawsuit against Bank of America.

Stein’s Chapter 11 bankruptcy was confirmed on February 7, 2011 and allowed payments to creditors lasting eight years.

On August 19, 2011, two days after the California State Bar assumed jurisdiction over Stein’s law practice, Stein filed an adversary proceeding against the California Attorney General asking for “at least $10 million in damages for purportedly violating the automatic stay.” The action filing by Stein wanted to prevent the California Attorney General from its enforcement action.

Three days later Mitchel Stein filed another effort with the bankruptcy court in Florida to prevent the turnover of all property stein zed from Stein. On August 26, 2022 the Florida Court denied Stein’s motion after finding Stein had “no likelihood of success on the merits.”

At the hearing Stein “raised the issue of a Mercedes Benz AMG SL55 Roadster which Stein represented he owns pursuant to a compromise approved by the bankruptcy court. The Court then prevented the state court receiver from taking his Mercedes. – Source

To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)

The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.

The Irish will, within a few days, walk away from the debts of its banking system.

The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

The French and German governments will meet to decide whether (a) to recapitalise the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

They will recapitalise, and recapitalise their own banks, but declare an end to all bailouts.

There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.

This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalising a number of banks via debt-equity swaps.

Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.

When Los Angeles lawyer Luis Rodriguez responded to a summons-like mailer soliciting him to join other homeowners in a lawsuit against the Bank of America, he was told he qualified to be a plaintiff and had only to “donate” $6,000 to sign up. Rodriguez, a deputy public defender and member of the State Bar Board of Governors, was told the bank had misled consumers, but “high caliber” lawyers would handle the case. Be patient, he was told; these cases take a year or two to resolve. And, he was promised, he would receive some money.

The solicitation came to Rodriguez’ home and although he once had a BofA loan and had refinanced, the bank was no longer involved. But he apparently was a target of the latest marketing effort to attract homeowners who, unlike Rodriguez, are facing foreclosure. (Rodriguez did not join the suit.) The California Department of Real Estate issued a consumer alert last month warning mortgage holders to beware of such solicitations by lawsuit marketers who request upfront fees to file “mass joinder” or class action lawsuits with promises of extraordinary home mortgage relief.

The marketing materials variously claim a class action lawsuit may already have been filed and a homeowner can join as a plaintiff and can stop paying the lender, the lawsuit will help modify a home loan, or filing a lawsuit will stop the homeowner’s payment obligation and foreclosure. One Internet advertisement claims, “. . . at the very least, damages could be awarded that would reduce the principal balance of the note on your home to 80 percent of market value and give you a 2 percent interest rate for the life of the loan.”

The marketing materials “always seem to suggest with hyperbole that the result an individual homeowner can get is everything from a cash settlement to reduction in the loan or what they call an equity strip, which means they get the home free and clear,” said Wayne Bell, DRE chief counsel.

Such claims, he added, are “often overblown and exaggerated. But people are desperate for some kind of hope, and this gives them the hope.”

The “mass joinder” and class action solicitations are the latest in a long list of ways to deal with the housing foreclosure crisis that began in 2009. The Department of Real Estate issued consumer alerts and fraud warnings early on about loan modification scams, in which lawyers took fees upfront but then did none of the promised work to help clients avoid foreclosure. In October 2009, Senate Bill 94 became law in California, prohibiting lawyers from collecting upfront fees in loan modification or mortgage forbearance matters.

Scammers quickly followed up with schemes related to short sale transactions, forensic loan audits, false and misleading claims of special expertise and credentials related to home loan relief services, and other real estate and mortgage relief swindles. In January, the Federal Trade Commission also banned advance fees but carved out an exception for lawyers who meet certain conditions. For the most part, however, SB 94 trumps the FTC ban and prohibits lawyers from collecting advance fees for loan modification work.

The newest claims, usually made via direct mailers and the Internet, offer both legitimate-sounding litigation services and promises of extraordinary remedies, all “with the goal of taking and getting some of your money,” Bell said.

The State Bar, which created a loan modification task force in 2008 to handle a groundswell of client complaints about lawyers who commit misconduct in that area, is starting to receive complaints about lawyers who offer to add clients to a class action lawsuit. Each client generally pays a non-refundable fee, anywhere from $3,000 to $9,000, to be added as a plaintiff. Bar investigator Tom Layton said he believes thousands of people have been solicited and signed up, and he estimated bogus foreclosure litigation operations may have collected between $10 million and $15 million. It is unclear whether lawyers are engaging in marketing, doing legal work or sharing fees with non-lawyers.

An Internet search of terms like “foreclosure defense,” “mortgage litigation” and “mass joinder” produces no shortage of results, including an invitation to join a lawsuit against the Bank of America that claims 1,200 plaintiffs. Bell provided a flyer from an operation claiming to represent a “nationwide group of attorneys” that explained that distressed homeowners have three options when considering whether to hire a lawyer – start making payments on your home, move out and either pay rent or a new mortgage or hire a lawyer.

“By hiring an attorney,” the flyer says, “you not only get the immediate protection and assistance you need to prevent you (sic) lender from taking your home but you also have a chance of getting a much lower payment, lower principal balance and in some cases elimination of the mortgage altogether.”

Another site advises simply, “Sue Your Mortgage Lender.” It talks about “[a] secret conspiracy that transpired among a vast network of blood-thirsty financiers. . .” and asserts that “[b]ankers along with loan officers were utilizing bribery and kickback strategies to sway real estate appraisers. . .”

The site includes a 16-page retainer agreement with a fee based on the value of the consumer’s property value. The smallest retainer fee is $4,000.

A solicitation circulating in the Hispanic community in Los Angeles offers “for $10,000 we can get you your home for free.”

Bell urges consumers to be skeptical about marketing pitches and to carefully vet lawyers and examine claims that lawsuits can protect homeowners from foreclosure. He explains that litigation can be expensive and protracted and there are no guarantees with respect to the outcome.

“Mortgage rescue frauds are extremely good at selling false hope to consumers with regard to home loans,” Bell warns. “The scammers continue to adapt and to modify their schemes as soon as their last ones became ineffective.”

On April 13, 2011, the Permanent Subcommittee on Investigations of the U.S. Senate released a report titled “Wall Street and The Financial Crisis: Anatomy of a Financial Collapse.”

Section VI of the Report, pages 318 to 639, is titled “Investment Bank Abuses: Case Study of Goldman Sachs and Deutsche Bank.” Part B of this section, pages 330 to 375, focuses on Deutsche Bank and is titled “Running the CDO Machine: Case Study of Deutsche Bank.”

The Deutsche Bank case study section is divided into the following areas:

(1) Subcommittee Investigation and Findings of Fact

(2) Deutsche Bank Background

(3) Deutsche Bank’s $5 Billion Short

(a) Lippmann’s Negative View of Mortgage Related Assets

(b) Building And Cashing In the $5 Billion Short

(4) The “CDO Machine” (5) Gemstone

(a) Background on Gemstone

(b) Gemstone Asset Selection

(c) Gemstone Risks and Poor Quality Assets

(d) Gemstone Sales Effort

(e) Gemstone Losses

(6) Other Deutsche Bank CDOs

(7) Analysis

The Analysis Section, pages 374 – 375, states the following clear condemnation of Deutsche Bank’s practices:

Deutsche Bank was the fourth largest issuer of CDOs in the United States. It continued to issue CDOs after mortgages began losing money at record rates, investor interest waned, and its most senior CDO trader concluded that the mortgage market in general and the specific RMBS securities being included in the bank’s own CDOs were going to lose value. Mr. Lippmann derided specific RMBS securities and advised his clients to short them, at the same time his desk was allowing the very same securities to be included or referenced in Gemstone 7, a CDO that the bank was assembling for sale to its clients. In fact, the bank was selling some assets that Mr. Lippmann believed contained “crap.” While the Gemstone CDO was constructed and marketed by the bank’s CDO Desk, which is separate from the trading desk controlled by Mr. Lippmann, both desks knew of Mr. Lippmann’s negative views. The bank managed to sell $700 million in Gemstone 7 securities which then failed within months, leaving the bank’s clients with worthless investments.

This case history raises several concerns. The first is that Deutsche Bank allowed the inclusion of Gemstone 7 assets which its most senior CDO trader was asked to review and saw as likely to lose value. Second, the bank sold poor quality assets from its own inventory to the CDO. Third, the bank aggressively marketed the CDO securities to clients despite the negative views of its most senior CDO trader, falling values, and the deteriorating market. Fourth, the bank failed to inform potential investors of Mr. Lippmann’s negative views of the underlying assets and its inability to sell over a third of Gemstone’s securities. Each of these issues focuses on the poor quality of the financial product that Deutsche Bank helped assemble and sell. Still another concern raised by this case history is the fact that the bank made large proprietary investments in the mortgage market that resulted in multi- billion-dollar losses – losses that, in this instance, did not require taxpayer relief but, due to their size, could have caused material damage to both U.S. investors and the U.S. economy.

By the middle of 2006, Mr. Lippmann repeatedly warned and advised his Deutsche Bank colleagues and some of his clients seeking to buy short positions about the poor quality of the assets underlying many CDOs. He described some of those assets as “crap” and “pigs,” and predicted the assets and the CDO securities would lose value.

At one point, Mr. Lippmann was asked to buy a specific CDO security and responded that it “rarely trades,” but he “would take it and try to dupe someone” into buying it. He also at times referred to the industry’s ongoing CDO marketing efforts as a “CDO machine” or “ponzi scheme.”

“Gemstone” in the above summary refers to a CDO that the Subcommittee chose to examine in detail called Gemstone CDO VII Ltd. (Gemstone 7). The Subcommittee report states the following (on page 331) regarding Gemstone 7:

In October 2006, Deutsche Bank began assisting in the gathering of assets for Gemstone 7, which issued its securities in March 2007. It was the last in a series of CDOs sponsored by HBK Capital Management (HBK), a large hedge fund which acted as the collateral manager for the CDO. Deutsche Bank made $4.7 million in fees from the deal, while HBK was slated to receive $3.3 million. It was not the last CDO issued by Deutsche Bank. Even after Gemstone 7 was issued in March of 2007, Deutsche Bank issued 9 additional CDOs.

Gemstone 7 was a hybrid CDO containing or referencing a variety of high risk, subprime RMBS securities initially valued at $1.1 billion when issued. Deutsche Bank’s head global trader, Mr. Lippmann, recognized that these RMBS securities were high risk and likely to lose value, but did not object to their inclusion in Gemstone 7. Deutsche Bank, the sole placement agent, marketed the initial offering of Gemstone 7 in the first quarter of 2007. Its top tranches received AAA ratings from Standard & Poor’s and Moody’s, despite signs that the CDO market was failing and the CDO itself contained many poor quality assets.

Nearly a third of Gemstone’s assets consisted of high risk subprime loans originated by Fremont, Long Beach, and New Century, three lenders known at the time within the financial industry for issuing poor quality loans and RMBS securities. Although HBK directed the selection of assets for Gemstone 7, Mr. Lippmann’s CDO Trading Desk was involved in the process and did not object to including certain RMBS securities in Gemstone 7, even though Mr. Lippmann was simultaneously referring to them as “crap” or “pigs.” Mr. Lippmann was also at the same time advising some of his clients to short some of those same RMBS securities. In addition, Deutsche Bank sold five RMBS securities directly from its inventory to Gemstone 7, several of which were also contemporaneously disparaged by Mr. Lippmann.

Footnote #1325 on paqe 347 shows the disdain for the products the traders were selling was widespread among the traders, as a trader sends a parody of a rap song to his boss at Deutsche:

Mr. Lippmann’s negative views were shared by his traders. In an email originally sent by one of the traders on his desk, Rocky Kurita, the CDO business is set to a song, “CDO Oh Baby,” by VanillaIce with the following lyrics: “Yo vip let’s kick it! CDO oh baby, CDO oh baby. All right, stop, collaborate and listen. Spreads are wide with a technical invasion. Home Eq Subs were trading so tightly. Until Hedge Funds BotProtection daily and nightly. Will they stop? Yo I don’t know. Turn up the Arb and let’s go. To the extreme Macro Funds do damage like a vandal. Now, BBs are trading with a new handle. Print, even if the housing bubble looms. There are never ends to real estate booms. If there is a problem, yo, we’ll solve it. Check out the spreads while my structurer revolves it. CDO oh baby, CDO oh baby.” 11/8/2005 email from Jordan Milman to Greg Lippmann, DBSI_PSI_EMAIL00686597-601 (forwarding an 11/8/2005 email from Rocky Kurita at Deutsche Bank).

Ameriquest Mortgage Securities, Inc. (AMSI) loans were part of the Deutsche Bank warehouse inventory that were included in Gemstone 7. On page 362 of the report, the Subcommittee finds that Mr. Lippmann was also very disdainful of the Ameriquest loans, but that he bought them to sell to investors:

On April 6, 2006, Mr. Lippmann called AMSI 2005-R7 M8 a “crap name.” In a June 16, 2006 email, Mr. Lippmann called AMSI generally a “weakish name.” On December 12, 2006, Gemstone 7 purchased $5 million of another RMBS, AMSI 2005- R11 M10, with no objection from the Lippmann trading desk. (footnotes omitted)

The Report has very many examples of Mr. Lippman and his colleagues and traders sending emails to each other wherein they repeatedly refer to loans and securities as “absolute pigs” and “generally horrible” and “crap” as Deutsche Bank was buying these very loans and securities to sell to investors. “Doesn’t this deal blow?” Lippman asks one of his traders (page 361), as they forge ahead with the deal.

The Subcommittee Report records in painful, exhaustive detail the building and collapse of mortgage securitization and in particular the role of two of the largest entities, Deutsche Bank and Goldman Sachs, in causing investors to lose billions while they reaped the largest profits in the history of their companies.

The Subcommittee Report focused on the financial collapse and Wall Street. The aftermath of that financial collapse was widespread unemployment and foreclosures.

If the Subcommittee had extended its investigation, it would have found that the trusts with the loans from the four mortgage companies identified as “crap” by Deutsche Bank’s traders became the top foreclosure litigants in the country as Deutsche Bank itself became known as “America’s Foreclosure King.”

When Deutsche Bank, as trustee, foreclosed, it was no more honest with courts and foreclosure defendants than it had been with investors. To prove to courts and homeowners that the trusts owned the mortgages in foreclosure actions, Deutsche Bank most often relied on documents produced by Lender Processing Services (“LPS”) to create mortgage assignments to the trusts when the mortgages had been originated by Ameriquest, Fremont, Long Beach and New Century.

LPS employees signed thousands of mortgage assignments as if they were officers of Ameriquest, Fremont, Long Beach and New Century.

Both the Alpharetta, Georgia and the Mendota Heights, Minnestoa offices of LPS produced these Assignments.

On these Assignments, the dates that the trusts acquired the mortgages are falsely stated.

These false Assignments were prepared from 2007 to at least February, 2010. When LPS stopped producing the Assignments, employees of other mortgage servicing companies continued these practices.

The Deutsche Bank trusts needed these Assignments because they failed to get Mortgage Assignments from the loan originators to the trusts – even though Deutsche Bank promised investors and the SEC they would get these mortgage assignments.

On tens of thousands of these LPS produced Assignments, the mortgage servicer is identified as American Home Mortgage Servicing. On the documents produced by LPS subsidiary Docx in Alpharetta, the servicer is identified in a box in the upper left-hand corner as “AHMA” or “AHCIT.”

AHMA is an abbreviation for American Home Mortgage Acquisition, the company that became American Home Mortgage Servicing in Coppell, Texas. American Home Mortgage Acquisition, owned by billionaire investor Wilbur Ross, (the “King of Bankruptcy”) purchased the $45.3 mortgage servicing business of bankrupt American Home Mortgage in September, 2007.

AHCIT is an abbreviation for American Home Citigroup. In February, 2009, Citigroup sold its servicing rights on 185,000 loans to American Home Mortgage Servicing (AHMSI) for $1.5 billion. Citigroup was one of the primary servicers of the Ameriquest loans.

Only a few courts have recognized that the LPS assignments were fraudulent and forged, even after former employees of Docx admitted on a segment of CBS “60 Minutes” to forging over 4,000 documents each day for several years.

No criminal charges have been filed against Deutsche Bank, Lender Processing Services or American Home Mortgage Servicing and all three of these corporations continue to pursue forecloses in courts throughout the United States using fraudulent mortgage assignments to trusts created by Deutsche Bank and sold to investors as the bank was shorting these same investments.

Success is dependent on the goals of the plaintiff. The objective of gaining title to land free of any liens is rarely achieved, and has not been achieved in California. However, California debtors have used the action to remain in their homes for years after defaulting. (Ghervescu v. Wells Fargo Home Mortg., Inc., 2005 WL 6559918 (Dissolving preliminary injunction restraining trustee from delivering deed to winning purchaser at trustee’s sale).)

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A wrongful foreclosure action alleges an “illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust.” (Munger v. Moore (1970) 11 Cal.App.3d. 1.) These actions work best when brought prior to the non-judicial foreclosure sale. To prevent the sale, the plaintiff must apply for an injunction and convince a judge that they are entitled to the injunction and that without it they will suffer irreparable harm. (Cal Code Civ. Pro § 526.) If the injunction is successful, the debtor can stay in the home for the duration of the lawsuit.

In Ghervescu v. Wells Fargo Home Mortg., Inc. (Cal. Ct. App., Nov. 16, 2010, E048925) 2010 WL 4621734, a borrower used the above procedural strategy to keep his house for over eight years after his default on the loan. After default, Ghervescu arranged a forbearance agreement with his lender, and some time shortly thereafter applied for a loan modification causing confusion with the lender. The lender failed to put the foreclosure proceedings on hold, and Ghervescu failed to make his payments on time.. The bank did not follow up on the pending application, and held a trustee’s sale prior to promised date of sale. Ghervescu quickly filed for a preliminary injunction to restrain the trustee from delivering the deed to the winning purchaser of the house at the trustee’s sale. The granted injunction prevented the foreclosure sale from constituting the final adjudication of the borrower’s rights. (See Smith v. Allen (1968) 68 Cal.2d 93, 96.) He lost at trial, and his motion to amend complaint and denied. The case bounced around through three trials and two appeals, finally ending in judgment for the bank.

Many Californians in default on their mortgage and facing foreclosure have filed quiet title and wrongful foreclosure actions. What is a quiet title action against a lender, and are plaintiffs successful in California?

BRIEF ANSWER:

A quiet title action in California to determine the owner of property does not generally allow a mortgage borrower in default on their payments to claim title to the land free of liens. However, the action when combined with a wrongful foreclosure claim is often successful in extending the amount of time a defaulted borrower can remain in the house. While in essence, this is simply prolonging the inevitable, it can give a borrower a temporary feeling of control over their own destiny.

A cause of action to quiet title seeks to determine adverse claims to real or personal property. (Cal. Code Civ. § 760.020.) The action is commonly commenced by homeowners when a lender wrongfully forecloses on their property. My research has not found a favorable California decision quieting title in a mortgage borrower challenging foreclosure. The filing of quiet title actions only prolongs the amount of time a borrower can remain in a house after defaulting.

Theory behind the current suits

The UCC governs negotiable instruments such as mortgages, and it defines a loan as a transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. Most mortgages are made by investment banks, who then package many similar loans into a mortgage backed security and sell the securities. To convert the mortgages into stocks, each mortgage note must be destroyed. A mortgage and a stock certificate cannot exist at the same time. This creates a gap in the chain of title, and theoretically making the loan invalid. As a result, homeowners can fight foreclosure through a quiet title action and receive clear title. The current trend to argue a break in chain of title is weak, because a “plaintiff may recover only upon the strength of his or her own title, however, and not upon the weakness of the defendant’s title.” (Ernie v. Trinity Lutheran Church (1959) 51 Cal.2d 702, 706.)

A promissory note is usually secured by a deed of trust in the real property. The trust names the security owner as the beneficiary and a loan servicer as the trustee. A trust is a form of ownership in which the legal title of a property is vested in a trustee, who has equitable duties to hold and manage it for the benefit of the beneficiaries. (Restatement of Trusts, Second, §2 (1959).) The trustee under a valid trust deed has exclusive control over the trust property. Usually, the lender records a deed of trust with the county to secure the loan to the debtor. The deeds identify the trustee, and most often identify Mortgage Electronic Registration Systems (MERS) as the nominal beneficiary.

Challenges to MERS

MERS is a company created by the banking industry to bypass recording statutes and filing fees. MERS records who currently owns the notes on a mortgage. A foreclosure may be brought in the name of MERS, and the trustee may act on behalf of MERS to effectuate a non-judicial foreclosure. MERS may also directly initiate a foreclosure proceeding, and California’s “statutory scheme (§§ 2924–2924k) does not provide for a preemptive suit challenging standing.” (Robinson v. Countrywide Home Loans, Inc., (2011) 199 Cal. App. 4th 42, 46.)

The MERS system of foreclosure has been upheld in California based upon two rationales. First, courts have held that MERS, acting as the agent of the beneficial owner, does not need to prove authorization by the beneficiary to foreclose. (Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 55-56.) Second, contract law legitimizes the system, because recent deeds of trust require that the borrower agree that MERS can proceed with foreclosure in the event of default. (Id. at 1157.)

Procedural Requirements for Plaintiffs

California mortgagors must file in the Superior Court, which has the authority to grant the equitable relief of quieting title in an individual. (Cal. Code Civ. §760.040.) Once a party has filed the action, they must file a notice of pendency with the office of the county recorder. (Id. §762.010(b).) This notice puts all other parties who are claiming the party on notice that the plaintiff is claiming the land as his, and stops any transfers of the property during the lawsuit.

To survive a demurer, A plaintiff must file a verified complaint that includes: (1) A legal description and street address of the subject real property; (2) The title of plaintiff as to which determination is sought and the basis of the title; (3) The adverse claims to the title of the plaintiff against which a determination is sought; (4) The date as of which the determination is sought; and (5) A prayer for the determination of the title of the plaintiff against the adverse claims. It is highly likely that a claim merely alleging that the plaintiff has an interest in the land will not make it past a demurer. (See Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 712 (N.D. Cal. 2009) (Dismissing claim merely alleging plaintiff had an interest in land foreclosed upon by bank).)

Tender Rule

A plaintiff seeking to quiet title in the face of a foreclosure must allege tender, which is “an unconditional offeror an offer of performance of their obligations under the Note, made in good faith, with the ability and willingness to perform.” The “Tender Rule” is derived from several cases involving disputes between junior and senior lienholders. (See Arnolds Mgmt. Corp. v. Eishen (1984) 158 Cal. App. 3d 575, 580; FPCI RE-HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1022.)

The policy behind the rule is that it would be a useless act to set aside a foreclosure sale based upon a procedural defect when a mortgage borrower cannot redeem the property in absence of that defect. (Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 118.) Some courts interpret the Tender Rule to only require that the mortgage borrower tender delinquent pre-foreclosure payments prior to any claim of quiet title. (Id. at 117; Ghervescu v. Wells Fargo Home Mortg., Inc., 2005 WL 6559918.)

Top Justice officials connected to mortgage banks

By Scot J. Paltrow

Fri Jan 20, 2012 9:31am EST

(Reuters) – U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had…

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Thursdays LIVE! Click in to the The Neil Garfield Show Or call in at (347) 850-1260, 6pm Eastern Thursdays Prior to the securitization era began, no party to litigation was entitled to a legal presumption of facts when they had engaged in patterns of conduct in which they had forged, fabricated or otherwise attempted to […]

http://www.wect.com/story/37671186/new-billboard-accuses-mortgage-company-of-fraud WILMINGTON, NC (WECT) – A Wilmington resident and businessman has taken out a billboard on Eastwood Road accusing SunTrust Mortgage of dishonest business practices. The billboard has a picture of a home on it, and says “bogus loans” and “#SunTrustScandal,” directing people to […]

The US was a trial run and it worked perfectly for the investment banks. They got money from investors in exchange for what investors thought were RMBS. As they sold more and more of the junk “mortgage bonds” the Ponzi scheme grew geometrically and has now been institutionalized in the US. Globally the loan standards […]

Of the number of people who “purchased” a loan product leading up to the mortgage meltdown- most were refi’s on refi’s. At one point it was reported that MERS had data on 80 million mortgages — but that includes mortgages that were paid off by sale, refi etc. At last count the number of people […]

It’s always best to start at the beginning. All REMIC Trusts appear to be written up as common law trusts permitted under the laws of the State of New York or the State of Delaware. The problem with the REMIC Trusts is that they are not common law trusts nor trusts of any kind. Consider […]

Message of the day to homeowners and their lawyers: “stop admitting things that you assume are true. By admitting those facts you are hanging your client or yourself. Even the client is apt to say “Yes that is my signature on the note” when it has been described by opposing counsel as the original. In […]

Editor’s Note: S.2155 is known in Washington as the Crapo bill. A fitting name. Even Georgetown Law professor and former CFPB adviser Adam Levitin in a blog post warns the dangers of further bank deregulation. This bill functionally exempts 85% of US banks and credit unions from fair lending laws in the mortgage market By […]

First a little background. On February 6, 2018 a California federal judge certified a nationwide class of borrowers accusing Countrywide Financial Corporation of using inflated real estate appraisals to inflate its loan origination business from 2003 to 2008, overturning successor Bank of America’s claims that borrowers won’t be able to back up their racket […]

The Yvanova string of cases in California are based upon some vague notion of whether a void assignment (e.g., past the cutoff date) could be ratified by the trust, trustee or trust beneficiaries. Firstly, the trust can only operate through a trustee. That is black letter law in every state. In REMIC Trusts the Trustee […]

As Bill Paatalo (who brought this to my attention) says: “You can’t make this s–t up.” Reality is much stranger than fiction. This marks the point where we have entered the Twilight Zone in law where the rule of law is just a guidepost not to be confused with the real rule of men. Sheila […]

Thanks to Investigator Bill Paatalo for bringing this class action to our attention. http://homeloanjustice.com/ ATTENTION! IF YOU WERE WRONGLY DENIED OR DELAYED FOR MODIFICATION OF YOUR MORTGAGE PAYMENTS, YOU MAY BE ENTITLED TO SUBSTANTIAL COMPENSATION. CONTACT US NOW TO RECEIVE A FREE EVALUATION. Bank of America Lawsuit Information The U.S. Government intr […]

Upon doing the deposition of Joeffery Long Wells Fargo I was amazed that they could be so blatant as against the California Homeowners Bill of Rights but then again it is Wells Fargo Joffrey Long rough draft Joffrey Long exhibits

Robert Wilbert | Latest News | April 29, 2017 The Debtor testified that RCS notified him that on June 1, 2016, Ditech would begin servicing the Note. A Ditech representative contacted the Debtor in June by phone and informed him that according to Ditech’s records, the Debtor was $2,000.00 in arrears on the Note. The […]

I would only add that none of the Trusts actually come to own the debt, loan, note or mortgage anyway. The creation of “assignments” and “powers of attorney” merely create the illusion of a transaction that never occurred. Rod Ciferri is licensed in New York State. I strongly recommend that lawyers read the following excerpt […]

By Tony Sarabia Published in Los Angeles Daily Journal January 3, 2013 Litigators often reach for doctrines such as res judicata or collateral estoppel to narrow the scope of a case. Res judicata prevents re-litigation of the same claim that was litigated in a prior case. Collateral estoppel prevents re-litigation of the same issue that […]

Getting the 50,000 or three times the actual damages (b) After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to Section 3281, resulting from a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 292 […]

2920.5. For purposes of this article, the following definitions apply: (a) “Mortgage servicer” means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note […]

2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or instrument, other than a […]

CIVIL CODE SECTION 2920-2944.10 2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or […]

Many of my readers are probably aware that California law allows commercial landlords to accept a partial payment of rent after service of a 3 Day Notice to Pay Rent or Quit and continue with an eviction action. This right to accept a partial payment after service of the notice is unique to commercial tenancies […]

On January 10, 2014 new RESPA rules went into effect concerning loss mitigation procedures. The new rules specify procedures a servicer must follow if a mortgage loan borrower requests loss mitigation assistance, such as a loan modification. The rules were drafted by the Consumer Financial Protection Bureau (“CFPB”). In drafting the loss mitigation requireme […]

CONSTRUCTIVE FRAUD: The tort negligent misrepresentation (also known as “constructive fraud”) requires that each and all of the following elements be proved: “(1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) [ […]

CONCEALMENT FRAUD: The tort of deceit or fraud by concealment requires that each and all of the following elements be proved: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally […]

PROMISSORY FRAUD: The tort of deceit or fraud by a false promise requires that each and all of the following elements be proved: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent at the time of making the promise; (3) the promise was made […]

PROVING FRAUD and or MISREPRESENTATION: DECEIT OR INTENTIONAL FRAUD The tort of deceit or intentional fraud requires that each and all of the following elements be proved: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable rel […]

PLEADING FRAUD / MISREPRESENTATION IN A COMPLAINT: In California, fraud must be pled in the complaint specifically. General and conclusionary allegations are not sufficient. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 74; Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268) Unlike most causes of action where the “the policy of liberal construction of the ple […]